According to Standard Chartered's most recent Sustainable Banking Report 2023, retail investor capital of $543 billion may be raised for climate initiatives in India by 2030. Based on investor interest from a survey of 1,800 respondents in ten emerging nations in Asia, Africa, and the Middle East, the research highlights the ability of individuals to fight climate change and finds a$3.4 trillion worldwide potential for climate investing.
A total of $324 billion might be invested in climate mitigation initiatives in India; the most popular themes are energy storage, renewable energy, and energy efficiency. A total of $219 billion may be raised for adaptation, encompassing food systems, biodiversity, and resilient infrastructure. According to the survey, the biggest percentage of investors in India—96%—are interested in climate investment, and an additional 84% of them like to see a rise in capital flows related to climate change. When making such investments, their motivations are primarily to make a beneficial influence and to uphold their personal ideals.
But a number of obstacles, which differ depending on the type of investor, are preventing them from turning their curiosity into an investment.
In order to realize the full potential of retail capital, the sector must assist investors in overcoming these obstacles. To encourage increased retail engagement, financial institutions, authorities, businesses, and individuals must work together to provide a larger choice of climate assets.
Banks and asset managers must also collaborate to develop novel climate assets that align with the interests of emerging investors, such as the blue economy and biodiversity. Financial institutions are essential in helping to mobilize retail money through three key strategies: providing investors with information, personalizing products, and providing outcome-based information. Fintech and digital solutions will facilitate investor processes and serve an enabling role.
The industry across the world also needs to align reporting standards and mandate minimum disclosure requirements to boost investor confidence.
Marc Van de Walle, Global Head, Wealth Management, Deposits & Mortgages, Standard hartered, said: “Financing our collective response to climate change is a critical challenge. Overall climate mitigation and adaptation face an annual funding gap of trillions of dollars. Institutional capital is often the focus when mobilising funds to bridge this gap – the scale and power of retail investor capital is a lesser-known opportunity. To overcome the current disconnect between investor interest and the scale of climate investments, the industry needs to improve access to solutions, harmonise reporting standards and measurement of impact. We continue to work closely with our clients to match their investments to their areas of interest, so they can help finance solutions for a more sustainable future.”
Saurabh Jain, India Head, Wealth Management, Standard Chartered Bank, said: “Climate change is a key challenge for India, with frequent extreme weather events, a growing population and increasing urbanisation highlighting the need to bring rapid focus into building climate-resilient infrastructure and staying on course to achieve the country’s net zero targets. Our report shows that over half a trillion dollars could be available from retail investors to finance climate investments. Wealth managers can play a big role in channelling these investments into impactful financial solutions. At Standard Chartered Bank, India, we continue to work with our clients and asset managers to mobilise capital for climate action through innovative products.”